The Mercury News Interview: Ahmad Chatila, president and CEO of MEMC/SunEdison

The solar industry is often divided into two camps: the companies that manufacture solar panels, and the companies that install them.

SunEdison does both. The company manufactures silicon wafers and modules through a combination of in-house and joint ventures, and owns and operates solar power plants for several commercial, government and utility customers. SunEdison has installed solar power plants at five California prisons, including Chuckawalla Valley and North Kern State Prison.

In 2009, SunEdison was purchased by MEMC, the Missouri-based pioneer in wafer technologies. In 2011, SunEdison moved its headquarters from Beltsville, Md., to Belmont.

MEMC/SunEdison completed 430 megawatts of photovoltaic system installations in 2012, a 52 percent growth over 2011, and expects growth to continue. The Mercury News recently sat down with CEO Ahmad Chatila; the interview has been edited for length and clarity.

Q Solar manufacturers have been struggling with an oversupply of solar panels worldwide. SunEdison is in a unique position in that you both manufacture wafers and oversee large projects. What's your sense of how the industry overall is doing?

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A Solar modules are one part of the equation: making solar electricity cost effective is what's most important to the success of the industry, and lower module costs reduce overall system costs. We control much of the value chain: We can control the cost curve upstream with our partners in cell and module manufacturing, and we have a 2.6 gigawatts pipeline of contracts. Publicly traded module makers don't have a path to the promised land; they have huge debts and no profits. The shakeout is far from done.

Q What's the most important public policy driver for the solar industry, at either the state or national level? A federal carbon tax or cap-and-trade program? Renewable energy standards? What do you think about the innovation vs. deployment debate?

A Solar needs to be treated like other sources of energy. There's no such thing as unsubsidized energy. The American government subsidizes oil and coal, but is criticized for its support of renewable sources of power. The government has a very important role to play in research, particularly when it comes to universities and national labs, and the government should invest more in the labs. Think about the role of Bell Labs. Most of the libertarians in Silicon Valley would not have their jobs, or their wealth, without the government. It's arrogant to say there's not a need for more R&D. You should always invest in R&D. In terms of deployment, the solar industry is definitely solving the cost problem. Costs are coming down. The intermittency of solar and storage is a more difficult challenge.

Q What do you think of Steven Chu's tenure as energy secretary?

A The Department of Energy under Chu has done a great job. Some companies they bet on failed. But we've hired a lot of people from Solyndra. Solyndra really grew out of Applied Materials, and they had a great product. They just couldn't build the factory fast enough to scale manufacturing and drive down costs.

Q In 2011, SunEdison moved its headquarters from Maryland to Belmont. Was that a good business decision?

A When you think about the solar market in the United States, California is like a country. So it's like having your headquarters in Germany. A lot of the talent we need is here, and the markets are here. We have about 150 employees in Belmont, and we'll add more people.

Q SunEdison has a rural electrification project in India called "Eradication of Darkness." Why is this so important?

A We are bringing distributed-generation solar power plants to 29 villages in the Guna district, and to 50,000 people who currently do not have access to electricity. Solar is changing the way people live. Lack of electricity contributes to a form of energy poverty: You can't study, you don't have economic opportunities. We're literally transforming lives through innovation.

Q The relationship between MEMC and SunEdison isn't always clear: MEMC is the parent company of SunEdison, but MEMC is based in St. Peters, Mo., and SunEdison is here in Belmont. Have you thought about re-branding the company?

A When I joined the company in 2009 my idea was to hunker down and fix things and survive the recession. Now the energy side of the company is really the growth engine. The semiconductor business is about $1 billion a year, but the solar and energy division is roughly $2 billion a year. We're focused on being One Company, One Culture and have proposed changing the name to SunEdison.

Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.

1. He was recruited as MEMC/SunEdison's CEO from Cypress Semiconductor; the thought of becoming a CEO rarely occurred to him, even when he was a top executive.2. Unlike most CEOs in Silicon Valley, he doesn't golf. Or cycle.3. He's passionate about rural electrification.4. He's led a process called "One Company-One Culture" so that MEMC and SunEdison act as one cohesive company.5. Under his leadership, the company has announced a plan, subject to shareholder approval May 30, to change its name to SunEdison, so there is just one powerful, global brand.